For the past 27 years since establishment, Garakdong Agricultural and Fishery Wholesale Market, the world's single largest wholesale market, has led the domestic wholesale market. But due to dilapidation, market facilities became unsafe and the facility structure and traffic routes became obstacles to improving the logistics such as shipment of pallets and mechanization of shipment operations. Because the market could not respond flexibly to environmental changes in the distribution of goods, a reconstruction project (the first phase) was recently launched to modernize the market.
With this background in mind, this study aims to present a basic direction and a strategic step-by-step action plan on reconstructing the wholesale market. The action plan is a comprehensive blueprint on estate planning, building layout, and a transportation and parking system for competitive and efficient future operations with core facilities and an advanced operating system. The blueprint is made by meticulously forecasting future changes in the distribution environment for both producers and consumers. The future changes considered here include expansion of Nonghyup's wholesale operations and growth of the eating-out industry and school catering services.
This study examined the tasks that need to be performed in designing the second phase of the project and laid down the foundation for producing a good design with the help of experts in the fields of designing and wholesale business. A common ground was reached among distributors, suppliers, local residents, and experts through consultations, relay discussions, workshops, and public hearings.
In this study, we estimated the transaction amount of fruits and vegetables and fishery and livestock products for year 2020 when the project to modernize the wholesale market will be completed. In the past, the amount of transactions made in the Garak wholesale market had rapidly increased since the market's establishment, but since 2000, transactions have been stagnant with repeated ups and downs. In the case of fruits and vegetables, there were little increases recently after a continued period of stagnation. In the case of fishery products, trade has been on a decreasing trend. Unlike the trade volume, however, trade amount has continued to increase rapidly since the market's establishment. The trade amount for 2020 is forecasted by comprehensively considering the changing trends in trade volume and trade amount and price characteristics and factors that influence the trade volume. According to the forecast, the trade volume of fruits and vegetables is expected to increase by 7.8% from 2010 to 2,317,000 tons, and the trade volume of fishery products will increase by 1% from the same year to 118,300 tons.
To make a master plan for the second and third phase of the reconstruction project, this study presented the direction for design, estimated the area size, and arranged each facility with an operating plan. And especially in order to make it possible to design the wholesale facilities without difficulty for the second phase of the reconstruction project, consultations were held with interested parties, such as wholesale firms, intermediary wholesalers, merchants, local residents, and suppliers and buyers, through consultation meetings, relay discussions, workshops, and public hearings. Opinions were collected through surveys of suppliers and buyers and surveys were also conducted to examine the suppliers' market and overseas markets. All the contents that need to be benchmarked were also covered and the final modernization plan was presented after reviewing various alternatives that were suggested in the advisory committee meeting.
In the future, the domestic wholesale market is expected to have developed into a wholesale market that is based on negotiated transactions, and this transformation from today's auction-based trade is destined to take place after a period of diversification of the trading method. Due to the revision of the enforcement ordinance and regulations of the Act on Distribution and Price Stabilization of Agricultural and Fishery Products, the transaction method at the wholesale market was changed from one that centered around a bidding system to a transaction system that puts fixed price trade and negotiated trade on equal footing with the bidding system. As a result, the share of trade based on a fixed price system and negotiation is expected to increase substantially.
The wholesale transaction system for agricultural and fishery products in Korea has been showing a tendency of following the footsteps of Japan's transaction system. As this is the case and in view of the speed in which intermediary transaction is expanding in Japan with the cooperatives playing a central role, the share of intermediary transaction in Korea for fruits and vegetables is expected to increase from the current level of 20% (8.2% in fixed price trade and negotiated trade and 10.8% in unlisted trade) to about 50% in 2020 as these methods of trade including unlisted trade will grow.
Therefore, facility modernization (that is, design and reconstruction) of the Garak wholesale market should be carried out in anticipation of future changes in the transaction system. In the future, there will still be agricultural produce that will require bidding and in some cases auctioning will be developed further, but since negotiated trade is destined to expand, the wholesale facilities should be designed for intermediary wholesalers whose main trading method is intermediary transaction, and the design should be made in such a way that there should be no problem in conducting auctions as it is today's main transaction method. Also, since fixed price trade and negotiated trade will increase, the shop arrangement should be made in such a way so that it could make the best use of the facilities for collection and delivery of goods by intermediary wholesalers.
In the case of the fishery market, which is planned to be reconstructed during the second phase of the reconstruction project, it is necessary to arrange the wholesale shops for mostly negotiated trade and install the auction floor for competitive bidding at the same time. But since fixed price trade and negotiated trade are forecast to increase sharply, the volume of fishery products directly delivered to and shipped out from wholesalers is expected to account for a large share of shipments handled by the wholesale market. Accordingly, the demand for the auction floor is expected decrease substantially.
In facility modernization, it is important to install highly mechanized facilities in a limited land. For this reason, it is necessary to arrange the basement and ground facilities in a compact manner (in multi-story structure) so that construction space can be used most efficiently for storage, processing, and delivery of goods. Although underground facilities can be used for storage, collection and delivery of goods as well as a parking space, wholesale shops can only be allocated to the first level of basement. So in order to facilitate large transport vehicles, it is necessary to make the story height higher and widen the space between building columns. This will result in increasing the cost, however, so it is necessary to make the ground floor into a multi-story structure.

Researcher : Byeong-Ryul Kim et.al
E-mail Address : brkim@krei.re.kr